Opening Bell: 05.25.12

J.P. Morgan Unit Made Risky Bets on Firms (WSJ)
The JPMorgan unit whose wrong-way bets on corporate credit cost the bank more than $2 billion includes a group that has invested in financially challenged companies, including LightSquared Inc., the wireless broadband provider that this month filed for Chapter 11 bankruptcy protection…The Special Investments Group last year took a $150 million stake in closely held LightSquared, in a deal that J.P. Morgan lost money on, according to a person familiar with the bank.

Both Campaigns Seize on Romney’s Years at Bain (NYT)
…the Romney campaign is actively recruiting testimonials from workers who have had positive experiences with Bain. It is getting ready to release advertising highlighting Bain’s marquee success stories, like the turnaround of Staples. It is considering seeking out middle-class surrogates — a fireman or members of a teachers union, for instance — who would be willing to talk about how Bain managed and increased the size of their pension funds, a lesser-known aspect of private equity…Mr. Romney’s advisers are betting that if they stay out of the nuances of private equity and tell a story about turning around failing companies, they can transform the Bain attacks into a narrative that underscores Mr. Romney’s image as a skilled executive who can steer a troubled economy back to prosperity.

ECB Official: On Greece, ‘We Are Working on Plan A’ (CNBC)
“It’s our strong preference that Greece stays in the euro zone…We are working on plan A,” Joerg Asmussen said in the interview yesterday. “I always work on plan A. I am not speculating, I am working to make plan A successful,” he added.

What Would A Greek Exit Mean For The US Economy? (Reuters)
usiness investment would stall, banks would pull back on credit, and lost wealth as equity prices fall would cause consumers to slow their spending. Commodity prices would plunge, helping importers but hurting growth in export economies.

Short Sellers Find Friends In Banks (WSJ)
As traders at Morgan Stanley were frantically trying to shore up Facebook Inc.’s FB share price following the company’s initial public offering, other managers on the deal were helping short sellers bet that the newly minted stock would fall. Trading desks at Goldman Sachs Group and J.P. Morgan Chase, two of the firms that helped Morgan Stanley underwrite the IPO, were among those lending out Facebook shares that hedge funds needed for short sales, according to people familiar with the matter. While it isn’t uncommon for Wall Street firms to make shares available for shorting on IPOs they manage, Morgan Stanley, the lead underwriter, didn’t lend shares, according to people familiar with the matter.

Escaped monkey holds up flight at JFK for hours (NYP)
Monkey business held up a Beijing-bound flight at Kennedy Airport nearly four hours yesterday.
A monkey escaped its crate in the cargo hold of an Air China Boeing 747 scheduled to leave Terminal 1 at 4:50 p.m., said Port Authority police. Port Authority emergency services officers and an airport worker caught the monkey and handed it over to the airline. The animal never got out of the jet’s cargo hold. The foot-tall monkey was one of about 50 to 60 being shipped to China for medical research, said police sources. “He was a slippery little beast,” one source said.

Bankia Shares Suspended Ahead of Board Meeting (WSJ)
EFE news agency reported Thursday that the lender will ask the government for more than €15 billion ($18.80 billion). The bank said it requested the suspension ahead of the meeting, at which it will also approve its 2011 earnings report. The board meeting will begin at 2:30 p.m. GMT.

Moody’s Downgrades Major Nordic Banks (WSJ)
Moody’s said the funding and margin issues left the banks susceptible to unexpected losses from which it would be a challenge for them to rebuild capital. It also highlighted risks to asset quality, with the Swedish economy exposed to weakness in Europe and the banks’ variable-rate mortgage books vulnerable to interest rate changes.

USDA Is a Tough Collector When Mortgages Go Bad (WSJ)
Unlike private firms, the USDA doesn’t need permission from a court to start collecting on unpaid debts. It can in some cases seize government benefits and tax refunds before a foreclosure is completed. After foreclosure, the USDA can go after unpaid balances, even in states that limit such actions by private lenders.

Nasdaq CEO went ahead with Facebook IPO despite signs new software had bugs (NYP)
During a conference call on Monday evening, Nasdaq officials said that they were unaware of any problems with the system. However, sources said that there may have been signs that the system wasn’t glitch-free even at the 11th hour and that Nasdaq opted to roll the dice. “They may have thought they did not have any material issues with the systems,” said one exchange platform official.

Lacrosse Party-Boy Image Worries Coaches Who See Slower Growth (Bloomberg)
“It’s really important that the lacrosse world grows up a little bit,” Danowski said from his office in Durham, North Carolina. “We are getting more TV exposure; more people are able to make a living through lacrosse. If we want to be accepted in the mainstream, then it’s time for us to grow up.”

Salt 2012: A Fund Manager’s $710,000 Blackjack Breakfast (AR)
Geismar asked O’Leary what his name was and where he was from. “You like the Dallas Mavericks? Yeah? Let’s be a maverick!” he said to the new player and threw him a $5,000 chip to bet on O’Leary’s hand. O’Leary started beating the dealer, too, winning Geisma thousands of dollars a hand. After some big wins, Geismar hugged him in excitement. “He was jumping into the pit screaming ‘we’re going to need more chips over here!”

Today the trading room is almost as quiet and peaceful as the handicapped stall. I took the Chronicle sports section with me earlier and didn't even have to "run the gauntlet" of those natgas fuckers and the shit heads in refined products. Now that I'm back, I note that everyone plans their fucking time off around holidays so the floor gets real quiet and a man can fucking reflect on things without getting badgered by the fucking engineers for a 20 year HO strip. Back in the day, a fucking "HO strip" meant something completely different at the annual East Texas Fish Fry in Longview!! Back then every "soiled dove" in East Texas and North Louisiana would flock into Longview and after an appropriate time the local Sheriff would come in and arrest about 15 of them and then we'd have to pass the hat to bail 'em out at that evenings fish fry. A fellow named Elmer used to be the lead sled dog in that hat passing area. I wonder if he's still alive? Don't ask me why refinery buyers of crude oil used to be some of the horniest men on the planet in those days (with refined fuel dispatchers coming in a close second). It must be in their blood or how they were trained. I have no fucking clue. Anyway, as I'm walking around the floor's nearly empty natgas area I see some keyboards have Bible quotes taped to them and their corresponding monitors. Oh shit. Somebody's in a bad fucking trade, marriage or thinks their fucking spreadsheet on gas price index data is dreamed up. Well, that's what it means to my old ass. Fucking risk managers today don't even have a clue about that kind of signal to look for because they're all about 38 years old and studying Bible quotes on monitors as POTENTIAL GIANT RISK signals don't get taught in MBA courses. I guess they are generally too busy trying to manage hyper-ventilating derivative structures that the traders are begging them to let stay on the books for "just one more week!! Please!!" Fuckheads. If I was the risk manager for that asshole, I'd be having lunch and chats and asking little questions like, "How's your trading going? Are our risk tolerances comfortable for you? Have you hidden any bad trades in your fucking desk?" And here come the fucking engineers to look around the floor at the "state of the art" trading room. My rule of fucking thumb is that the more "state of the art" your trading room is, the more fucking bad deals are off the books or in SPEs somewhere. Management never asks me for my "rules of thumb". As I leave the natgas area I wish I had a book entitled "How to Give a Firm Handshake" for those "dead fish" presenting assholes. Warren Buffett is probably the only guy in Omaha who knows how to give a firm handshake. I say that because I imagine most Nebraska farm kids can do the same. But the natural gas business is inbred with people out of the midcontinent whose fathers worked at big interstate pipelines in the business and passed their inability to give a firm handshake on to their male children whom they make you hire thinking you'll get better transport rates to major markets if you do. Before I let my Aggie intern go for the weekend I told him to go nominate a cargo of Frade crude oil into Exxon Baton Rouge onboard the "Hua San" via the Mississippi River. He's never been yelled at by the schedulers and it's important to learn prankery and dumbassery in the oil business at the same time. I haven't heard any shouting yet but it will happen soon no doubt. As I wander into the refined products area, the one trader left behind by his band of brothers is watching me carefully. Ever go for a walk in your neighborhood and pass by a house with a couple of cats in the front yard. Ever notice how they crouch down and look at you like they're ready to run? That's what refined products people do when oil traders walk by. Exactly the same. I think it's because they do all those little barge deals and their puddle pirate vessel trades mostly by brokers. Either that or there aren't enough Esquire Magazines to go around. I was at the White Oak having some soggy wrapped beers the other afternoon with some of oil and refined products guys and after about 5 rounds our Kansas lease crude buyer told a 2 oil trader "I'll give you $500.00 if you let me kick you in the nuts 3 times……." After much hooting and hollering, the 2 oil guy agreed. Kansas proceded to pop him once, then twice and 2-oil was taking it pretty good despite an unusual facial configuration. We waited on the third pop to the nuts but it didn't happen. I asked Kansas, "Aren't you going to kick him in the nuts again?" and Kansas replied, "No….because then I'd have to pay him 500 bucks."

The more frequently you monitor your portfolio, the more likely you are to observe a loss. This is likely to cause short-sighted decisions and could hurt your investment performance. If you are checking your portfolio more than once per quarter, you’re doing it too much.